Governments could set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could top-up their taxes to the minimum rate, thus eliminating the advantage of shifting profits.
Also, countries would lose the device used to push policies that suit them once a global minimum rate is put in place.
Impact on India
The decision is likely to benefit India as India has wanted to keep corporate tax rate artificially lower to attract FDI in comparison to tax havens or low taxation countries.
